00:12
Sarah Stone
Hello and welcome to let's Talk Social Value, a podcast where we explore what creating value for society means and the practical ways you can go about creating it. My name's Sarah and my guests work in different areas of social value across public, private and third sector organizations, from public sector procurement to ESG and sustainability, social enterprise and impact measurement. I'll be asking them about their work and what they've learned and they will be sharing their tips and experience to help us all make our organizations better. Very excited about the episode I've got for you today. I am joined by Andrew O'Brien and Hana Kapetanovic from the think tank Demos.

00:51
Andrew O'Brien
Demos is an independent cross party think tank that was created about 30 years ago. And our drive is to change policymaking to include greater voice and representation of the public. And then we also work on another kind of set of kind of key themes and areas, one of which is around what we call the citizens economy. So how to create an economy whereby people just don't think in terms of their individual interests, whether that's business just making profit or individuals just getting the goods and services you need, or the government thinking about tax revenue, but just thinking about things as a citizen, thinking holistically about how we need to collaborate and work together to generate the best possible social, environmental and economic impact that we can collectively.

01:35
Andrew O'Brien
So for that reason, obviously we're very interested in the issue of social value and we've spoken previously, but as you know, I have a somewhat long association with the social value agenda.

01:44
Sarah Stone
Can you tell people about that? Because obviously that's how we first met way back when, but I mean, you were one of the key people behind the act at the time. Can you talk about that a bit?

01:53
Andrew O'Brien
Yes. Now I was very privileged to work for Chris White's mp, is the author of the Social Value act and I helped him with the kind of the parliamentary process around that. As you'd imagine, like any good assistant does, you know, making sure, you know, getting the speeches in time and the drafting and coordinating the conversations and just helping Chris to really, you know, drive the legislation through Social Value act journey, I think, is Lord Dick Newby, his Lib Dem peer. And when we passed Social Value Act, Chris obviously steered it through the House of Commons, but you need a peer to do it in the House of Lords and obviously it's coalition government then. So of course, first thing we thought, God, great to get Lib Dem to do this, to show it's kind of all cross party.

02:33
Andrew O'Brien
And we had Hazel Bliss on Board from the labor side, and she was very great at kind of driving labor through that. But the House of Lords is even more impenetrable than the House of Commons in terms of the kind of the regulations and the bylaws and the processes. But he absolutely got the social value concept straight away. He got the importance of the legislation straight away. And he was just brilliant, corralling everybody, you know, getting peers to turn up, answering questions anytime you needed him, day or night, do briefings or stuff like that for officials or other peers. He was always there. And actually, the House of Lords, it's much harder to get things through the House of Lords because they regulate themselves. So the time and all that stuff is regulated by government in the House of Commons.

03:14
Andrew O'Brien
So we knew, you know, things like we knew what day it was going to get, read on, how much time you're going to get and who will speak and so on. In the Lords, you have no idea what's going to happen. But Lord Newbie, he just sailed it through and it was, you know, in the end, what could have killed it. Not from a kind of an aggressive perspective, but just because of the complexity and the moving parts that were required to get it to the House of Lords. Thanks to him, it sails through.

03:36
Sarah Stone
And he's somebody that people just have never heard of and don't think about, did he end up doing stuff in social value or.

03:41
Andrew O'Brien
I think he's still very senior in the Democrats and has been kind of instrumental in every building in recent years. He's a great parliamentarian, but more than that, I think he just like Chris himself, he sort of recognized there was a great opportunity to do something impactful and it required, you know, putting the egos to one side and just really getting into the nuts and bolts and coalition building and working with people. And, you know, Chris was fantastic at doing that House Commons. And in Dick Newby, I think he got a kind of a mirror of himself in the House of Lords who kind of equally got the opportunities. And it was a great partnership. And yeah, it was a real pleasure to work with him on that.

04:19
Andrew O'Brien
And without him, getting it to the House of Commons is only one half of the journey, and the Lords, he was brilliant in the other half. So, yeah, underappreciated hero of social value.

04:28
Sarah Stone
We'll send him a badge or something, but we definitely need to do that conversation with Chris and record the secrets behind that and how it came about. I think there's an article, I'm sure I wrote an article on it years ago. When we did our first interview. I'll try and find it and put it in the show notes. But yeah, we should record that again for all the geeks like us that care about legislation and how you get legislation to actually happen.

04:48
Andrew O'Brien
But I think it also explains some of why we have the system we got today as well.

04:53
Sarah Stone
Yeah, it does.

04:55
Andrew O'Brien
And it's partly unique because it had a unique birth. And sometimes when I explain to people, they go, why is it like this? And then when I explain to them how it came about, they go, oh, I see, right now I get it. Yeah, yeah, that's why it's the way it is. So, yeah, happy to have that.

05:08
Sarah Stone
So true. Yeah, I do remember that first conversation we had when I was asking you all the secrets behind the app, because it's one of the most influential members bills out there.

05:17
Andrew O'Brien
Yeah, absolutely. I mean, not many get passed. More get passed now than they used to, which I think says something maybe about the way politics is changing and is less dominated by the kind of tribal nature of politics. But when we passed the act in 2012, it was the first piece of legislation, a sizable piece of legislation to have been passed for many years. And most of the time things that do pass are things like, you know, create a new coin for the Queen's 76th birthday or whatever. So they're not that meaningful. So. Yeah, well, I'm always happy to come back on Sarah and talk about the inside baseball.

05:49
Sarah Stone
Well, we didn't record it. We never recorded that conversation. Maybe we should get you and Chris and Mark back and do it.

05:55
Andrew O'Brien
Oh, Chris would love to. And yeah, it was a near run thing, you know, but in the end we got it through. And I think it's definitely been when we look back because we just had the election, obviously, and you think about the coalition and the conservative governments we just had. And I think this is probably. They probably didn't realize it, but it's one of the biggest achievements they had in the 14 years they were in government.

06:12
Sarah Stone
I couldn't agree with you more. And it wasn't really them, was it? It was Chris and a number of other people. Hannah, can I just ask you just to introduce yourself?

06:20
Hana Kapetanovic
So I'm Hannah, I'm a lead researcher at Demos and I am much more new to the social value world. But I wrote a report that came out in July about it, which I'll be talking a bit about today. And one of the things I'm really interested in, which comes through in the report a bit is how and citizens kind of at the heart of policymaking. And you know, when you think about social value, I do feel like we often forget the actual people who we're creating this value for. And I tried to sort of do a bit to rectify that in some of my recommendations.

06:52
Sarah Stone
I couldn't agree with you more about that piece about putting people at the heart of it and the citizen economy, this concept. Can you just talk a little bit more about that? Because this, for me as an individual is. It's really goes to the heart of why I'm even doing social value at all. I suppose I just think this is just what we should do, like as human beings, you know, we should all lean in and we should all work together and we shouldn't just, you know, think, oh, it's the government's job to do this and it's the charity's job to do that and it's businesses job to do the other bit. I kind of think we all need to work together and we all need to lean in a bit more.

07:26
Sarah Stone
And if we all did, the world would be a much nicer place. Have I understood what you mean? Is this sort of citizen economy along those lines? Is it?

07:33
Andrew O'Brien
For me you're totally on the right lines. I mean, to sort of, you know, not get too highfalutin about it. I think if you think kind of after the Second World War, there was a consensus, the idea was the economy should be run in a sort of tripartite way between business and workers and government collaborating together. And then there was another consensus that kind of emerged with Reagan and Thatcher, which is very much more around the market and citizen as a consumer, essentially. And we should treat the public as consumers and think about them as individuals thinking about their own individual needs.

08:07
Andrew O'Brien
And I think what social value is part of is a kind of not a reaction against, but more of an evolution of that, which is, yes, we are all consumers and yes, we do have our individual needs, but we also want to live in a society where we feel connected and belonging to each other. And we do actually care about the planet and we care about our local areas, we care about the country and our public services.

08:29
Andrew O'Brien
And it's just trying to make sure that all of our institutions are not just thinking about their primary responsibility, which is often perhaps to their shareholders, their owners, or to me as an individual or my household, my family state, but to think broadly and more collaboratively, as you say, and think a bit more holistically, I guess, about our responsibilities and make sure that we don't in Driving for our own individual needs and ambitions. We don't end up forgetting that we are, as we would talk about it at demos, we are all citizens. We all have responsibilities that go beyond the individual business or family or society that we live in, but we have kind of more wider responsibilities. And yeah, we're trying to.

09:10
Andrew O'Brien
You know, that's why we're really interested in this piece of work around social value, because how do you use the levers you have available? Whether those are, in the case of social value, we're talking about procurement and regulation, tax. We look at the structure of business, we look at a range of different areas and try and see how do you get these things all collaborating so that their impact is more than the sum of their parts.

09:30
Sarah Stone
That brings us nicely round to the report, which is obviously the reason that we're here today. What's the background to it? So why did you write it?

09:39
Andrew O'Brien
One of the reasons we decided to write this report was we've obviously seen that with the current financial environment that the government faces and the local government faces, there is going to be renewed interest in how do we maximize the economic, social and environmental value that we can create from every pound of public spending. So as a think tank, obviously we want to make sure that our work is as relevant to the political and policy landscape as possible. So there was element of that also, as I talked about, you know, in terms of our values and this concept of the citizen economy, you know, we feel that social value has a really critical role to play in helping to culturally reset the environment, to make sure that businesses, government and citizens are kind of working together to generate outcomes. We're also delighted.

10:22
Andrew O'Brien
We kind of were conversing with our partner on this project called GS1UK, who are a fascinating organization. They're a membership organization that is responsible for the barcode and many of the kind of technologies that we use on a day to day basis that helps to kind of track and process information across businesses. And they were interested in this kind of growing trend around ESG and social value and what the role technology might be in helping to address some of those issues. And given the social value landscape, I thought, well, that's quite interesting. I don't think anyone had kind of done a real deep dive into.

10:53
Sarah Stone
They're a charity, aren't they?

10:55
Andrew O'Brien
They are, that's right. They're not.

10:56
Sarah Stone
Yeah, they're fascinating.

10:57
Andrew O'Brien
And we just thought so. A combination of the kind of great trifecta for any kind of think tank is, you know, politically interesting, exciting, aligns with Our values and the things that we're interested in and a really interesting perspective and angle which GS1 UK will bring to the table. So bringing all those things together, we embarked on this. And yes, of course, with a certain element of personal interest in it as well. I thought it'd be great to do another piece of work on social value and delighted that Hannah was able to kind of work on this as well and bring that kind of experience of citizen patriot engagement as well, which I don't think social value has seen a lot of in the past either. So it was a great. Yeah, very serendipitous.

11:36
Sarah Stone
Yeah. And Hannah, how did you do it? How did you write it? What kind of research did you conduct before you came up with the report?

11:43
Hana Kapetanovic
Started as a lot of think tank reports do, with a literature review to kind of narrow this scope. Actually started quite broad, so thinking about generally agendas relating to, you know, how can business create positive social, environmental, economic impact, which includes things like esg, corporate social responsibility, not just social value, but kind of going through literature review.

12:06
Sarah Stone
And just to interrupt you, but just for anyone that isn't familiar with what a literature review is, can you just briefly explain that? And also, Am I right? I'm thinking that there'll be some form of an index of all the literature that you did review somewhere at the back of the report. So anybody that's interested in reading some of that material that you read, I'm imagining they can get links to it in the report. Is that true?

12:25
Hana Kapetanovic
Yeah. So a literature review is basically, you read a lot of literature, you know, these days it all happens online, really. So just doing a lot of kind of keyword searching, figuring out what's out there, figuring out from what is the legislation in the space, you know, what are the key initiatives that have happened in this space, to what are the kind of academic articles that have been written around this? You know, what are academics thinking? What are other think tanks thinking? You know, just sort of mapping the space out and what are the really interesting gaps where we can fill, you know, with this report? And so in terms of if anyone's interested in having a look at what I read, basically look through the references of the report. That's kind of where it all is, where the magic is.

13:06
Hana Kapetanovic
And I won't have put in every single thing I read, but all of the kind of key stuff that I ended up using.

13:11
Sarah Stone
Yeah, that's so professional. Sorry. No, I interrupted you. So you did the literature review.

13:15
Hana Kapetanovic
So after doing the literature review, decided to focus in on Social value in particular, I think, just because I felt that's an area where the UK has really shown leadership. You know, we talked about the Social Value act and that was really quite a new thing. And I just felt like, let's seize this thing that the UK is doing well, as we know, you know, there's lots of things the UK doesn't do well, so let's go with this good thing.

13:37
Sarah Stone
And we are leading in this, aren't we?

13:39
Hana Kapetanovic
Exactly, exactly. So I really that this was an opportunity to build on that. So that's kind of, you know, figuring out what we're doing, you know, figuring out what's in the space, how to fill it, and then really just doing a lot of talking to people. So we did a few roundtables with businesses, with policymakers, some one to one interviews as well with policymakers. So this kind of ranged from different types of businesses, big businesses, small businesses, and also different types of policymakers. So some central government ones, local government, regional government, devolved administrations, just really trying to get a sense from different angles. And so through that process, that's kind of how we ended up focusing on the kind of local and regional government perspective. And it just felt like that was where the biggest opportunities for policy change were.

14:26
Hana Kapetanovic
Yeah, you'll hear kind of, as I speak, a lot of it is about finding where's the gap, where's the opportunity for us. Because, you know, in the central government there is just a lot more standardization through the social value model. For example, the legislation is a bit stronger, which is something we touch on in the report. Whereas in local regional government, the number of kind of standards and frameworks you could apply multiply and it just gets bigger and bigger.

14:50
Sarah Stone
Did I see that there were some stats in there for the numbers of different frameworks that, you know, different local government organizations are using? It was insane.

14:58
Hana Kapetanovic
Yeah, I think it was something like the government are applying 31 different frameworks. Something crazy like that struggle. Exactly, exactly. And that's definitely something we heard. And so it just felt like a more confusing landscape and therefore one that had a bit more opportunity first to kind of think about how policy can help change that. And then I think the other aspect as well was, you know, with regional government there has been a lot of political appetite both from the current government and the previous government in terms of devolution. You know, lots of interest in kind of combined authorities. The regional growth agenda, as we just thought, this is also politically quite a good way to go down.

15:37
Hana Kapetanovic
You do kind of also, as a think Tank have to think, you know, not only what do I think is right, also aligning with that, you know, where is the political interest. And so that's another reason you want.

15:47
Sarah Stone
To produce something useful. Right. You want to produce something people are going to read and is going to move the needle and actually contribute rather than just sit in a cupboard somewhere.

15:55
Hana Kapetanovic
Exactly. And that's what were hoping to kind of do with the regional focus. And so the final element of the research was some polling as well. You know, the people we spoke to were people that generally live and breathe social value. So, you know, they know all about it, but it's kind of important to go a bit broader than that. So that's why we did some nationally representative polling to understand what consumers think. And then we also did some polling with 500 SME business leaders to understand what broader kind of businesses think, not just those that know everything about social value already.

16:27
Sarah Stone
Oh, amazing. And super interested in that as well. So the consumers. Were you just polling, you know, any old person on the street or was it somebody that's already involved with procurement in some way and local government in some way?

16:38
Hana Kapetanovic
Just any old person? Just me. Before I wrote this report, I bet.

16:43
Sarah Stone
You got a lot of like blank people saying, what's social value? Never heard of.

16:46
Hana Kapetanovic
Yeah, so that one was more focused, to be fair, on kind of. We didn't use the word social value there. We did sort of talk about social, economic, environmental impact. So for a lot of people, you know, maybe they were thinking more about ESG or whatever, but we didn't want to be leading with terminology. We just thought generally, what do you think about kind of businesses doing stuff that's good beyond their day to day operations?

17:06
Sarah Stone
Yeah. So is that where a lot of the facts and all of the data that's in the report comes from that polling?

17:10
Hana Kapetanovic
Yes, exactly. Yeah, we had a few good stats there. And then the quotes come more from the policy business roundtables, interviews. Exactly.

17:19
Sarah Stone
Yeah. I often get people say to me, oh, how can I get data? How can I get things that I can use? And yeah, the report's packed full of it. So what did you find then? What kind of things did you come up with? And before you tell us, can we just talk for a minute about the title of the report? Can you just tell people what the title is and why you called it that?

17:37
Hana Kapetanovic
So I'm gonna have to give some credit to Andrew, who I would say far more dramatic.

17:41
Sarah Stone
He's smiling away. No one else can see this, but.

17:43
Hana Kapetanovic
He'S smiling Away here, he has more of a flair for drama than me. So he came up with the title. Andrew, do you want to tell us about the title?

17:50
Andrew O'Brien
I've probably just got more scars on my back, I think, more than anything else. So when the Social Value act was introduced, our view was very much. And the view in the community at the time was very much let a thousand flowers bloom. And we need a burst of creativity. And the social value isn't one thing. It's obviously, there's lots of different aspects to it and different people focus on different elements of it and there's always a big battle between can you quantify it, or is it more qualitative, and how you weight different things. But were very accepting of that in the beginning. But I think as time has gone on and it's become a.

18:24
Andrew O'Brien
Become more integrated into the way that government operates, with things like the social value model and the national procurement policy statements, and local government generating their own strategies and plans around it, and central government departments as well, and loads of tools and products developing from it. The feedback I've been getting from lots of people in the community is it's become a bit of a wild west, where you don't really know what is going on and, you know, who do you trust, who do you turn to, what tools work, what tools don't work, what is a robust and fair way of reporting and measuring your social value? So I think a lot of the issues that we encountered in the report was very much this lack of clarity and the need to bring some order to what's going on.

19:07
Andrew O'Brien
And that's not to crush innovation or to stop people from developing their own specific ideas around social value and how they want to go about measuring and reporting and talking about it and interacting with people. But how do you kind of create a safe space where people who enter the social value world can orientate themselves? So that's what we. We decided to call it Taming the Wild west. Which I'm not saying that Demos is going to become the sheriff in town, as it were, and go around and start locking people up, but I think sheriffs are a good thing and we probably could deal with a few more of them.

19:40
Sarah Stone
Sheriff Andrew O'Brien well, I'm always.

19:43
Andrew O'Brien
My dad and my granddad were big Western fans, so I've always had a little bit of the old John Wayne in me, so maybe I could have a second career as a cow.

19:52
Sarah Stone
I think it's a brilliant title because that's what first drew me to it when I Can't remember how I saw it because it is a bit of a wild west. And particularly in local government, they're absolutely spot on there. I would have used that term privately. So, yeah, I think it's perfect. So what were the key recommendations? What are the key findings of the report? And can you kind of summarize those for us?

20:11
Hana Kapetanovic
As Andrew kind of alluded to, we definitely found this sense of a wild west, I guess, both from the perspective of procurers. You know, they felt like they weren't really understanding whether the bidders had actually delivered the social value they'd promised it sort of just a lot of lack of transparency. They didn't feel like they had the oversight they needed. You know, it means that they can't evaluate how they're doing on social value, for example. And, you know, talking about businesses using different methodologies, you know, using different consultants, different data sets, different tools, it all becomes a kind of confusing landscape. And then from the kind of business perspective, I guess it's a wild west in a sense in terms of the different contracts and different standards and frameworks that are used in the different contracts from public sector procurers.

20:57
Hana Kapetanovic
So kind of finding themselves having to write each contract from scratch. I think the thing about, you know, this concept of Wild west is also it just adds a massive administrative and financial burden for businesses. And particularly if you think about SMEs, right. You know, we talk all the time about bringing SMEs into public procurement more. You know, the more you create burdens on them by making them have to do each contract from scratch, the higher the barrier for entry is for them and disproportionately so, you know, we heard from businesses that they really need kind of clearer standards.

21:28
Hana Kapetanovic
I think one other key thing that we did hear too, from both businesses and procurers was definitely like a knowledge and capacity gap where, you know, as I mentioned, that people we spoke to were pretty familiar with social value, but they talked about their teams. But also when you poll, you know, businesses more broadly, for example, we ask them what their understanding of social value is in relation to their business. It's a minority, it's 42% who said that they had a strong understanding of social value. And of course, this is also self reported anyway. And a lot of these businesses were telling us that they would want to know where to start if they wanted to share more information about their social, economic and environmental impact.

22:05
Hana Kapetanovic
And so definitely kind of an appetite for more information, more knowledge, capacity building, that sort of thing, as well as Kind of, as I mentioned, career standards. And sort of where we ended up in terms of our recommendations. The first thing that I set out in the report is these four pillars of a new vision for social value. And so first one is standardization and interoperability. Second one is transparency, third one's capability and the fourth one, incentivization. So standardization, interoperability, you know, standardization is pretty sort of self explanatory. You know, we should take steps towards some more consistent standards in public sector procurement, but also ones that support interoperability. So basically interoperability means a system being able to work with other systems or parts of other systems. So standards that are interoperable means that they can work with other standards, for example, global ones.

22:57
Hana Kapetanovic
You know, you don't want to be creating lots of conflicting standards, as we often find, you know, as I was mentioning in the local government space, for example. So that's the kind of first pillar, second one, transparency, which is such an important one and one that we really, you can really see a big lack of that. And I think that's one of the key reasons why it's such wild west. And so it's important in a few different ways. For public sector procurers, if they had more transparency in terms of how the bidders were doing against social value, they would be able to kind of evaluate that better and evaluate how overall they were doing on social value better.

23:30
Hana Kapetanovic
If we had more transparency for the public, they would be able to see kind of how their money was being spent in terms of public sector procurement. But also, if you just think about consumers as well in the private sector being able to kind of transparently track the social value of the products they're buying, that would help them be able to make decisions based on that. We saw some appetite in our polling for that too.

23:54
Sarah Stone
I also think there's a big need for transparency about understanding what social value is being committed to and delivered. So I have a great friend and he works in Aberdeenshire County Council and he told me some of their suppliers will, I can't remember if it's the council's requirement or if he's got suppliers that voluntarily offer this, but I'll ask him, I'll put it at the bottom of the post. But what they'll do is they will commit that as part of their contractual obligations, they publish a notice that says they call it community benefits, but the list of community benefits that they've promised to deliver. And they will also go to community meetings and do presentations to the community on the things they're contractually obligated to deliver. And it's that kind of simple, small thing that is so powerful that it's just missing.

24:39
Hana Kapetanovic
Yeah, I think it's so important. So we have figures from our polling that tell us that basically half of consumers are already considering at least one aspect of social value. So whether that's social, economic or environmental impact of a product or service or a company organization they're buying from, they're already considering it. And almost half said that great access to this information would actually change their buying habits. So it could be really powerful. But this information needs to be transparent. Right. So that sort of speaks, I guess, to the broader agenda, beyond social value as well as procurement one too.

25:15
Sarah Stone
Yeah. So standardization, interoperability, transparency.

25:20
Hana Kapetanovic
Yes. And then capability. You know, even if all the standards are there, the transparency is there. You need to actually understand how to deliver social value, also have the resources to be able to deliver it and be able to evaluate whether it's being delivered well and knowing where to turn if you don't know how to, or there are any kind of issues there. And so I mentioned there's a sort of capacity gap on both sides, and I think that's a really key one. The final pillar is sort of one that kind of runs through them all, which is incentivization. I mean, basically we need to incentivize businesses to properly deliver social value.

25:55
Hana Kapetanovic
And, you know, you need to do that through all of the pillars and you need to kind of basically create some form of incentivization, whether that's legislative or other, that enables us to reach all of the other pillars. So it's sort of a weird pillar, but it kind of runs through all of them. And then a broader theme, I guess, that runs through all the pillars. It isn't a separate pillar is this technology piece. And so technology can help all of the pillars, really. You know, it's a tool that can just help us achieve this vision a lot more efficiently. And we have lots of case studies in the report as well about areas where technology can help.

26:33
Hana Kapetanovic
So, for example, One thing that GS1UK has been working on is developing a tool where you can capture and store data on a product and sort of track it as it moves through a supply chain. And so, for example, the consumer sort of situation, if you have a QR code on a product in a shop, you could scan that QR code and sort of understand real time what has happened with that product and therefore, what is the kind of social, environmental, economic impact of that product. Been. And there's no reason why this couldn't apply to the public sector too. So I think there are some really interesting technological examples that we really think about.

27:11
Sarah Stone
Yeah, really cool. And in terms of specific policy recommendations, can you talk us through some of those? Because some of them say things like you talked about. Am I right in thinking strengthening the Social Value act to ask bodies to account for social value and establishing a Social Value Council as well? Can you talk through some of those?

27:30
Hana Kapetanovic
Yeah, definitely. So there's five policy and recommendations like making the report. I'll just talk through a few of them in the interest of time. You can read the full report very conveniently if you want to read all of them. They're all very exciting, I promise. So, yes, strengthening the legislation is definitely one of the kind of key ones and it's quite a simple but powerful one. So currently, central government is required to account for, rather than just consider social value, which is a sort of stronger terminology and sort of legal language through PPN 06 20.

28:05
Sarah Stone
That's the mechanism that requires them to do that. Right?

28:08
Hana Kapetanovic
Yes. And so what we're.

28:09
Sarah Stone
Local government don't need to. They don't fall under the remit of it. This is really important because a lot of people don't realize this. It's really. When I say to people, this is why there's such a big difference between local and central government. So carry on anyway.

28:22
Hana Kapetanovic
No, exactly. And so that's the sort of one of the key differences between central and local government. And so, you know, we basically think that local government should sort of come under that exact same sort of requirement, or as in the requirement should be strengthened for local government to be on an equal footing to central government and all public bodies sort of should have that to account for it, to make it a bit stronger.

28:44
Sarah Stone
Yeah. And the council, what's your thinking about around the council?

28:47
Hana Kapetanovic
The idea of a Social Value Council actually comes from a commitment that Labour have made and they've committed to create a new Office for Value for Money. And I think a lot of this comes out of public sector procurement scandals that we've seen, for example, during the pandemic. And so the idea of this Office for Value for Money would be that it would be there to ensure that public sector contracts represent value for money before they're contracted. And Social Value Council be something that would advise that to ensure that it's not just financial value that's being considered as part of this, it would also be social value that be considered. So that's actually Their idea, we can't take credit for that.

29:24
Sarah Stone
And where are they on that? Is that something they're going to do? Because there wasn't anything in the manifesto about it. But what stage is that Office of Value for Money at? And I mean, Andrew, do you know?

29:35
Andrew O'Brien
Yeah, the Office for Value for Money is. They're in the process of creating that and they published kind of public information about the fact that is going to be set up. The Social Value Council is something which I think they're looking at the moment and thinking about how that can be positioned. The government's just announced the review of the National Policy Statement, the mpps and I imagine that the Social Value Council will be something they'll be kind of considering as part of that process.

30:02
Andrew O'Brien
Because one of the things, the reasons they want to utilize the Social Value Council is that those of you that you might have heard Keir Starmer and others talk about this, they're very interested in this concept of mission led government and how they have these five overarching missions that are driving the kind of policy making and they want all of government institutions to kind of focus on delivering these five missions. And the Council is a way of thinking about how that can be done, obviously in a procurement landscape and how social value is a tool. And again, as were discussing earlier, I mean, social value can be many things and government is entitled to say these are our priorities when it comes to social value. And I think that's what the Council can help to do.

30:39
Andrew O'Brien
But we're also pushing in this report for them to be a bit more ambitious as well, because it's great to have a convene the council and discuss how can we maximize social value, how can it help deliver mission led government. But also if you've got government convening this body and you're bringing business, trade unions, the public sector together, there's an opportunity for us to become more than just simply a conversational group that can think about mission led government, but can actually help to maybe help bring a bit of order and clarity and think about how all the different aspects of the ecosystem line up together. So we're, you know, building on something which, you know, and again, were kind of talking with labor in opposition about some of this stuff and government will continue those conversations.

31:18
Andrew O'Brien
So, you know, there's a kernel of something there, but can we push that on a bit?

31:21
Sarah Stone
I have to say we did a piece of work in Santala looking at Labour's manifesto and looking at how much of it could be delivered through social value without needing additional legislation. And it's a significant amount, you know, that you can already, you know, as the kind of labour and said, well, we're going to introduce this legislation and that legislation and obviously that will come. But before that comes as an enormous amount that you can already ask suppliers to do using the mechanism of social value. That also speaks to that kind of citizen economy idea that, you know, well, some people might say, well why should they if it's not legislation? And I would say why shouldn't they? We don't need to wait for legislation to tell us what to do we? Half the time we can just do stuff.

31:59
Sarah Stone
And I think we've got so used to just waiting to be told what to do. And there's a lot that you think, well, you could just do it, you know, you don't have to wait to be told. Like one of the policy recommendations is about social value officers in larger companies and that something that maybe you can just explain that a bit more before. I, I mean that's the sort of thing if a company, somebody listening, likes the idea of it and likes the idea of the remit and thinks would be useful their business, you don't have to wait for a requirement to do it, do you?

32:26
Hana Kapetanovic
Yeah, so the idea there was to start by using legislation that already exists, so the Companies act of 2006 to amend that to require larger businesses, so businesses with 250plus employees to have a named social value officer. And this would be as part of giving a true and fair account of their company's activities. That's the legislative language. And so the kind of idea behind that was, you know, putting a bit of the burden on bigger businesses and ensuring that they had a kind of dedicated social value lead there. And when you do start to have a push like that, it can really make a network flourish. And we saw that with the Social Value act, right, a whole sector sort of spawned out of it. So this is completely something that businesses could do themselves and have a named social Value Officer.

33:16
Hana Kapetanovic
I think it really just sort of sets the tone in a way. It's like this is something we care about and this is someone that is going to be trained on this and can train people on this and can build the capacity within this organization. But I think with the legislative change aspect of it, I think what it would do is really push social value kind of beyond just the public sector and kind of would be able to actually really start to see whether this is something that kind of the private sector can be thinking about too, because it would just go much broader, it would just create more investment in social value and things.

33:49
Sarah Stone
And the private sector does think about. They just don't call it social value, you know. Right. You know, if you talk to especially large companies about their procurement, a lot of them are doing, you know, they call it sustainable procurement or. Yeah, but they do think about the things that they buy and how the money they spend can have impacts and look above and beyond their own activity. The last thing I just wanted to ask you about the policy recommendations was the Social Value Data Task Force, because that's also really interesting. And is that something that Labour are looking at, do you know?

34:16
Hana Kapetanovic
So the trusted Social Value Data Task Force, which is a bit of a mouthful, that's the area where we thought, okay, let's flesh out this idea of what the Social Value Council could do and really help labour flesh out their plans. And so we thought that one thing Social Value Council could do would be really responsible for the technological innovation and setting standards relating to technology. And so this task force could be made up of public bodies, social value practitioners, tech providers, kind of bring them all together and we list a number of things that the kind of task force could do. But one of them would be, for example, developing a social value methodology that sets out best practice for the measurement of social value. Developing social value code for tech providers.

35:01
Sarah Stone
That's a great idea.

35:02
Hana Kapetanovic
Yeah. So that they would basically set out, here's what you need to do if you want to build new technology to ensure that from the start, kind of transparency and all these good things are baked in.

35:12
Sarah Stone
You can't just claim a financial proxy and not explain where it's come from.

35:16
Hana Kapetanovic
Exactly, yeah. And so we have lots of ideas on what this could do. And it could, for example, as well be responsible for. With the upcoming Procurement act that's about to come into force. There's this idea of publicly available, sort of centralized database of public sector contracts, which we really support and think would be great for transparency, but making sure that social value and information. Social value is a key part of that. You know, the sort of task force could really focus on how you do that and, you know, how you make sure that people can access that data and that sort of thing.

35:47
Sarah Stone
I've often thought something like that would really help, you know, with this challenge where you speak to companies and they say, look, I'm delivering the contract in Manchester, but I'm being asked to create a job in Leeds. And I'm not in Leeds, I'm in Manchester. You know, and then you get a company in Leeds that says vice versa. I think if you had some kind of centralized repository of the information, you could see where jobs are being created and help to kind of. There isn't really a very good solution to that at the moment, but it might help address it. So that task force idea is super interesting. How's it been received? Have you had much feedback on that?

36:19
Hana Kapetanovic
Yeah, I think this idea of, you know, how we can use technology to push forward the social value agenda has been really positively received. And so the task force is part of that. It's really trying to see whether this can be a force for driving the innovation in tech that, you know, of course, can't all be done by the Social Value Council and its task force, but, you know, can be driven in some part there and, you know, can be a place where you could start trialing some new innovative tools and, you know, setting out guidance for how those work. And I think the sort of technology opportunity is something that a lot of people have been really excited about when we've been speaking about the report.

36:58
Sarah Stone
Yeah. One thing I would just say on technology, though, is we've got to remember not to lose the human at the center of it. You know, sometimes technology is a wonderful tool, but especially with social value, one of the risks is the people who are trying to have this near most positive impact do tend to get lost a bit and forgotten about.

37:13
Hana Kapetanovic
Yes, definitely. And that's why we sort of have some recommendations that make sure that citizens really are asked about what's valuable to them and that informs some of the standards that are created.

37:24
Sarah Stone
Yeah, I think that'd be really powerful. So what is the prize, then, if we get this right and what are the risks if we get it wrong?

37:32
Hana Kapetanovic
I mean, to start with the bad side, to me, the two key risks that I see to the social value agenda right now. So one is just the sector itself. We've talked about it being a wild west, and I think that's just, you know, meaning that people don't really know what's going on. And I think consumers pick up on that, taxpayers pick up on that. You know, investors pick up on that. Which leads me to the second thing, which I think is definitely a risk of and potentially already happening, loss of trust in the agenda. And I think we have seen this a bit with ESG in the US for example, I cite some studies in the report, for example, when there have been increases in greenwashing allegations, investors have decreased their investments in funds, advertisers sustainable.

38:17
Hana Kapetanovic
It's having a real impact in the US in particular. And that's really worried me that we might see a similar thing here in terms of what happens when people lose trust. Just means the social value agenda lose its weight. No one believes in it anymore, no one invests in it anymore. And we've even seen something similar, I suppose, in terms of loss of trust in public procurement through the scandals, you know, the PPE scandal, that sort of thing. And I think there's a big worry that all of that will mean people don't believe in it anymore. And I think that will be so detrimental.

38:50
Sarah Stone
I often say this. I know, Andrew, we've had this conversation. I think social value, when it's done right, is absolutely magic and truly transformational. It really shifts the needle and changes the way that companies operate because once they do it, they never go back because they see the benefits. You know, it's commercial benefits to creating social value through the way that you deliver your products and services, but done badly, all it does is increase costs. You don't get those benefits, so you get all the hassle, all the costs and all of the commercial. I mean, is this something you see?

39:20
Andrew O'Brien
Definitely. I think people's expectations of what social value can be or should be have risen over the past three or four years. I think people willing tolerate the messiness and the kind of challenges in, you know, getting to grips with social, which for many businesses and for the public sector as well. I mean, I don't want to make this all about, you know, SMEs or whoever who, you know, I know we often focus on because they can sometimes struggle with the adaptation, but sometimes there's bits of public sector who still, I talk to commissioners, public sector who are only now just discovering what social value is. And you think, God, 14 years.

39:53
Andrew O'Brien
But I think now people, because it's been around for over a decade as a concept, I think people are not going to give it the free pass that it perhaps would have got five or six years ago. We go, oh, this is all very new. It's all very novel. We're still getting grips with it. You know, people want to know that the way that we're doing social value is robust, that it's grounded in evidence that it's having a positive impact. As you say, Sarah, when it's done right, people really do, you know, see the benefit of it, but they're expecting to see those benefits realized much quicker. And I think they want to be given a bit more assurance that what they're doing is the right thing to do.

40:29
Andrew O'Brien
So I guess that kind of the stages of innovation often you talk about in business, you know, the pioneers who kind of gone out there and developed the social value system, they are now not the majority of people are now kind of that middle of early adopters.

40:43
Sarah Stone
You know the reason I'm getting really excited is I, I was showing some of this the other day. I mapped, you know, the innovation adoption cycle that kind of like early adopter there's come up with the middle and then there's the lag odds aren't there at the end. I mapped it to ESR and CSG and the cycle. I'll share it with you if you want. I'll share a link. I've showed this to someone and they said you're such a geek, who's going to be interested in that? And I'm like, somebody will be. Andrew will be.

41:09
Andrew O'Brien
Absolutely. And I do think we as a social value community need to recognize that the population that we're working with have changed and their expectations have changed. So the prize is still enormous. There are very few things where you can genuinely say they would be transformational. But I think social value, if were to embed social value into every private business, every public sector body, were all doing it efficiently and effectively. The level of impact you could create, I mean you could get to net zero years quicker, you could tackle issues around social mobility far faster and create far greater latest of equality of opportunity across the economy. You could generate faster growth, you could generate better levels of innovation.

41:52
Andrew O'Brien
So there aren't many policy areas you can look at that you go, this could really unlock, you know, something which will make the country feel different in 5, 10, 15 years time. But we can't try the patience of the businesses, the public sector, procurers teams, the commissioners, the public who they've heard the story, they know that this could be really valuable. But they now want to see the so what the kind of okay, what are we going to do about it? How can this, they want to see it happen completely and we've got to create an ecosystem that gives them confidence that's going to work. And I think we've got a lot of elements of that, but we're not quite there yet.

42:28
Sarah Stone
But hopefully we will get there. And finally, last question, how has the report been received? Particularly interested in anything you can tell us about policymakers and people within the new government. Government, you know, what's on their radar, which are the recommendations. When we've talked a Little bit about some of them, the council and the. But with the recommendations you think they might adopt, if any, and where you think Social Value might go over the next six to 12 months.

42:53
Andrew O'Brien
So at a national level, as we discussed earlier, you know, we've got this national procurement policy statement review taking place. I was surprised by how many references there were in the Labour manifesto around procurement. They've been quite quiet about it, bar the office value money. But actually if you see it, you know it's embedded in their industrial strategy, it's in their thinking republic sense, reform. So, you know, there's a lot of warm words within Labour. I've certainly had conversations with people within labour where in opposition and you know, looking to kind of touch base from now they're in government where they were thinking about some of this work.

43:24
Andrew O'Brien
I think also I would recommend people go back to some of the thinking that labor did on some of the debates that took place during the Procurement Act a few years ago, because a lot of suddenly myself and others were engaged in kind of supporting labor and some of their thinking on that. And you know, there was a lot of really positive support for Social Value. They were really pushing the government to take Social Value and properly embed it into the Procurement Act. And so I'm hopeful that energy and drive will remain there. And you know, champions like Angela Rayner, her team that were very instrumental in that at the time, are now in a position to hopefully put some influence on that. I think in terms of the key recommendations, yes, I think Social Value Act I agree with.

44:01
Andrew O'Brien
They didn't need to reform yet necessary to do everything. But I think if you're looking at kind of strong levers and levers don't cost a lot of money to change either. The act is an obvious area to look at. I think we're also coming up to 20 years since the last Companies act was passed and usually we review those in the kind of 15, 20 year cycle so there will be new Companies Act. And I think our recommendation around Social Value officers kind of fits into this whole point of who are the custodians of the ESG social value responsibilities that businesses increasingly have. And I think that certainly will be in the mixer for the kind of policy conversation. We also had some really positive feedback from combined authorities as well.

44:40
Andrew O'Brien
I was literally sharing a conversation about local government finance this morning and one of the things that came out from that was what is the relationship between local authorities, other public bodies on the ground and combined authorities? And I think what Hannah's report kind of has identified is there is a role for combined authorities to become kind of strategic market shapers in their area and to bring some consistently, at least at a regional level, between all the various different asks that public bodies and councils have. And so I think as they start developing new combined authorities, like those in the Northeast, start developing their strategies and plans for the policy areas they're responsible with, I think there will be a lot of interest in. Yeah, Combined authorities taking a bigger role in social value, which we sort of. We call for in the report.

45:24
Andrew O'Brien
And I think at a council level, you know, a lot of our recommendations were on the back of the conversations and direct feedback we had with those working on the ground within local authorities. So I know we've had some very good responses there as well. So I think what's most pleasing for me about the reception reports had is that not. I was nervous, but, you know, coming out and saying, it's a wild west. Yeah, I did think was going to provoke a few eyebrows to be raised, actually. I think generally the feedback I've had so far is that everyone agrees that this is the situation, and I think there is a lot of support for doing something about that and bringing a bit of order to the system.

46:03
Andrew O'Brien
But the next stage is obviously to turn those kind of the warm words and the warm feelings about that and to start putting in place the building blocks that can achieve that. And, you know, there are some interesting developments. I know you. You've got Isabella from the Institute for Social Value.

46:17
Sarah Stone
Yeah, the next episode, you know, there's.

46:19
Andrew O'Brien
Some developments taking place there. There's also a lot of, you know, very committed people in the social value community and practitioners who kind of want to take these conversations forward. But time is of the essence. I mean, coming back to what were saying earlier about the innovation cycle, we are in this kind of valley of death, potentially, where you don't get this right. People will start to switch off from social value and, you know, the credibility of social value will struggle to be maintained. So we've got to get a move on. But we've still got time on our side. I think we've still got a very supportive social value community. I think we still got policymakers who see the potential of social value.

46:56
Andrew O'Brien
So all the materials to make this work are there, but we now need to bring that real focus and will to kind of make social value. You know, it's no longer the kind of bright new kid on the block that everyone's kind of excited about. It's now that kind of grown adult that's now going to kind of go out in the world and make a huge impact. And that transition will obviously be a challenge, but hopefully our report makes a useful contribution.

47:19
Sarah Stone
I say it's a more than useful contribution. Thank you so much for your time today, both of you. It's been absolutely brilliant. We'll put a link to the report in the show. Notes. Where can people reach you if they want to engage with you? Are you on LinkedIn or where's the best place to find you?

47:32
Andrew O'Brien
So you can definitely look to on LinkedIn. We also have a website, www.demos.co.uk click on the research section. There you can find a copy of a report and everything else that we've published recently, which are all cracking reads, as you can imagine. And we're very active on X, formerly known as Twitter, and you can follow emos there. And we regularly update on not just our publications, but we do events online and in person and there might be things that are relevant to people listening to podcast because we cover a lot on public sector reform and procurement.

48:03
Sarah Stone
I'm sure there will be definitely. Thank you very much, both of you. Thanks very much. I hope you enjoyed this episode and thank you to my guest today. You've been listening to let's Talk Social Value. I'm Sarah Stone. You can subscribe wherever you get your podcasts and if you found this useful and you think other people will too, share the episode with your networks and consider leaving us a review. You you can also reach out to us by email hello@samtaler.co.uk or find us on LinkedIn.